Content summary:
Event: China Holdings released its annual report for 2020, with revenue of 1.625 billion yuan, an increase of 21.56% over the same period last year, and a net profit of 138 million yuan, an increase of 23.87% over the same period last year.
There has been a big increase in urban orders and steady growth in operational business. In terms of different industries, the revenue of urban sewage treatment business increased significantly by 81.49% to 746 million yuan compared with the same period last year, accounting for 33.99% of the profit contribution; the revenue scale of industrial parks and industrial sewage treatment decreased slightly, but the gross profit margin increased by 4.2% year-on-year to 36.16%, contributing 46.30% of the gross profit; small growth was achieved in the field of comprehensive environmental treatment, and the gross profit margin was maintained at about 31% to 32%.
Technology leading and or market recognition. The company promotes the construction, implementation and operation of Suixian No. 3 sewage treatment plant, and takes the lead in practicing "sewage resource utilization" and "carbon neutralization".
The development strategy, and further replication model, the implementation of technological development and technological breakthroughs, in which Yixing concept Plant will be completed and put into operation in 2021.
Profit forecast and investment advice. The company actively implements the "strategic shift to the south" and signs cooperation agreements with Changjiang Ecological Environmental Protection Group and China Electric Power Construction Group respectively, and the synergy effect is expected to be further reflected. It is estimated that the return net profit of the company from 2021 to 2023 is 1.83,2.27,272 million yuan respectively, and the EPS is 0.90,1.12,1.35 yuan respectively. Based on the current closing price of 11.65 yuan, the corresponding PE is 12.88,10.37,8.65 times, giving the company a "recommended" investment rating.
Risk tips. The company's performance falls short of expectations, vicious market competition, systemic risks in domestic and foreign secondary markets, risk of worsening epidemic situation at home and abroad, and economic recovery at home and abroad is lower than expected.
